Every once in a while, something arresting comes along in corporate governance that qualifies as a tipping point. Last year, it was the tide of votes in favor of proxy access resolutions. Once a surefire polarizer, access now seems almost a non-issue that will take root without drama at many companies. In 2016 the stunner with such potential was last month’s say-on-pay vote at BP. Might it be a harbinger of higher levels of scrutiny of executive compensation by institutional investors?
On Thursday, April 14 a jaw-dropping 59 percent of investors voted no confidence in the oil giant board’s compensation policies, including its decision to award a 20 percent raise to CEO Bob Dudley in a year that saw the firm lose $5.2 billion. The quantum involved would hardly have raised an eyebrow in the U.S. energy sector. Dudley’s total pay rose to $20 million, thanks largely to increases in pension contributions and deferred bonuses. By contrast, Exxon Chair/CEO Rex Tillerson was paid some $33 million in 2015. But investors rebelled in bulk at the London-based multinational, making a break with previous habits of voting solidly in support of compensation policies at BP.
